BRITISH American Tobacco has re-opened talks that could see hundreds of Southampton jobs switched to China.

It is understood that company bosses have been holding fresh meetings with officials in Shanghai about plans to build a cigarette factory in China.

BAT, which employs 1,200 people in Southampton, had declined to comment on the progress of its plans but business sources in Shanghai said it had held discussions in the past few weeks.

China, with 350 million smokers, is a vital market for tobacco companies as more stringent regulations and health issues put the pressure on western markets.

Its low labour costs also make it a more economically tempting site for manufacturers.

Hundreds of jobs are hanging in the balance at the BAT plant in Southampton after last week's bombshell announcement by the company that it will be switching one quarter of its cigarette production to Korea and Singapore in November.

The plant, in Regent's Park, is the company's last remaining factory in the UK, and the local workforce has felt increasingly vulnerable to threats from cheaper competition abroad.

Allan Short, the boss of the 26-acre plant has confirmed that job losses would be inevitable as the production of 6.2 billion cigarettes under the brands of State Express 555, Benson and Hedges, Vogue and Dunhill, heads overseas.

The plant has been running below capacity.

Staff and unions fear the possibility that all cigarette production will eventually be moved to the Far East to be near target growth markets like China.

BAT has instigated a review of its Southampton manufacturing and supply chain operation to assess what options exist for attracting replacement production or for continuing to operate on the lower volume base.

This is expected to take up to two months to complete.

BAT bosses were unavailable for comment.